The indices swung up and down throughout the week and were alternating just above the strong support from the weekly trendline drawn from the major bottom attained in March. If this weekly trendline was broken, it would have been a bearish sign. The weekly lows made by the Sensex of 14,680 and by the Nifty of 4,350 (both rounded) are now important support levels. If the indices confirm an intermediate uptrend here, it would have resulted in the bears gaining strength. Though the indices have ended the week with a small loss, the strong close on Friday suggest a possibility of a start of a fresh intermediate uptrend. It was tough time for traders with the indices alternating up and down.

The indices have currently closed just below the descending trendline on the daily charts and a close above this descending trendline on Monday will be the sign of strength for the bulls. The targets for the Sensex and the Nifty to get back into a fresh intermediate uptrend are at 15,535 and 4,619, respectively. The equivalent target for the CNX Mid Cap index to get back into a fresh intermediate uptrend is at 4,484.40. Before these levels are crossed, the Sensex will face a resistance at the gap between 15,284 and 15,367 which was created in the last week. The index will first have to move past these levels before it can attain higher levels. The Nifty does not exhibit any gap while the Nifty future has a gap between 4,503 and 4,552.

The indices have a number of resistance levels from here indicating that fewer frontline stocks will be participating even if the intermediate uptrend is established. The Sensex has resistance at 15,343 and 15,500 and the Nifty has resistance at 4,542 and 4,587. These levels will have to be crossed first before the indices head towards their intermediate uptrend targets. On the lower side, a drop below the weekly low as suggested above will mean the continuation of the intermediate downtrend and the supports to the Sensex are at 14,610 and 14,283. The Nifty has supports at 4,325 and 4,230.

In the last week, majority of the indices ended in red as the Sensex lost 1.11% and the Nifty ended 1.12% lower. The CNX Mid Cap index lost 1.72%. Among the sectors, the BSE Capital Goods sector was the largest gainer ending 1.09% higher and was followed by the BSE Power sector index which ended marginally higher with a gain of 0.10%. On the weaker side, the BSE Metals index ended 3.89% lower and was followed by the BSE Oil and Gas sector which lost 3.74%.

The earlier intermediate bottom for the Sensex is at 13,220 and for the Nifty it is at 3,918.75. These are the levels above which the current intermediate downtrend must end, if the major uptrend has to remain intact. The equivalent level for the CNX Mid Cap index is at 3,787.50. These levels will be raised to the last week?s low once these indices establish an intermediate uptrend.

Few stocks have started an intermediate uptrend and more will follow suit if the indices bottom out here and start a fresh intermediate uptrend. I will today discuss about a few stocks which look promising and will not discuss any sector today.

YES Bank went into a strong intermediate uptrend on Friday when the stock broke out with strong volumes into a new high for the current year. The relative strength line for the stock is bullish suggesting that the stock has been outperforming the indices and is headed higher. The indices have yet to confirm an intermediate uptrend, but yes Bank has already gone into a fresh intermediate uptrend indicating higher levels. The next weekly resistance to the stock is at 190, where traders can look for partial profits. Any pull back towards the support of 166 in the coming week must be used by traders to add to their long positions. Above the resistance of 190, the next resistance to the stock is at 240.

Aditya Birla Nuvo has formed a bullish ?Cup and Handle? formation on the daily charts and broke out above the ?Handle? on Thursday with a strong surge in trading volume. The Cup and Handle formation is a bullish formation suggesting higher levels for the stock in the current intermediate rise. Investors and position traders can pick up long positions in the stock with a stop at 900. Trail the stop higher as the stock moves up. The next resistance to the stock is at 1,120 where partial profits can be booked. Above this level, the next resistance is at 1,425.

All the stocks discussed today are exhibiting a bullish relative strength and have gone into an intermediate uptrend in the last week even as the indices have yet to confirm an intermediate uptrend. On Friday, the stock broke out above its earlier minor top of 247 with a strong surge in trading volume and is headed towards the next resistance of 262. Above this level, the stock is headed higher towards 285. Any pull back in the coming week towards the support of 247 must be used by position traders and investors to pick up long positions.

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